Correlation Between Xinhua Winshare and Shenandoah Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare and Shenandoah Telecommunicatio at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Xinhua Winshare and Shenandoah Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinhua Winshare Publishing and Shenandoah Telecommunications, you can compare the effects of market volatilities on Xinhua Winshare and Shenandoah Telecommunicatio and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Xinhua Winshare with a short position of Shenandoah Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Shenandoah Telecommunicatio.
Diversification Opportunities for Xinhua Winshare and Shenandoah Telecommunicatio
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xinhua and Shenandoah is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Shenandoah Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenandoah Telecommunicatio and Xinhua Winshare is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Xinhua Winshare Publishing are associated (or correlated) with Shenandoah Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenandoah Telecommunicatio has no effect on the direction of Xinhua Winshare i.e., Xinhua Winshare and Shenandoah Telecommunicatio go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Shenandoah Telecommunicatio
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 1.1 times more return on investment than Shenandoah Telecommunicatio. However, Xinhua Winshare is 1.1 times more volatile than Shenandoah Telecommunications. It trades about 0.21 of its potential returns per unit of risk. Shenandoah Telecommunications is currently generating about -0.21 per unit of risk. If you would invest 128.00 in Xinhua Winshare Publishing on October 12, 2024 and sell it today you would earn a total of 11.00 from holding Xinhua Winshare Publishing or generate 8.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. Shenandoah Telecommunications
Performance |
| Timeline |
| Xinhua Winshare Publ |
| Shenandoah Telecommunicatio |
Xinhua Winshare and Shenandoah Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and Shenandoah Telecommunicatio
The main advantage of trading using opposite Xinhua Winshare and Shenandoah Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare position performs unexpectedly, Shenandoah Telecommunicatio can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Shenandoah Telecommunicatio will offset losses from the drop in Shenandoah Telecommunicatio's long position.| Xinhua Winshare vs. Urban Outfitters | Xinhua Winshare vs. G III Apparel Group | Xinhua Winshare vs. Rocket Internet SE | Xinhua Winshare vs. Ribbon Communications |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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